Sprint, state of NY worried about AT&T T-Mobile merger

Mark Raby, 30th March 2011

Rival mobile carrier as well as the state of New York have added to the list of entities that aren't too happy.
"This transaction will harm consumers and harm competition at a time when this country can least afford it," Sprint senior VP of government affairs Vonya McCann said in a statement.

The company is worried that the merger would lead to antitrust violations, as it would make it by far the biggest mobile service provider in the country, and the only one offering mobile connectivity over a GSM network. Sprint, along with Verizon, use a different standard known as CDMA.

But it's not just Sprint raising a voice of concern. That's the kind of reaction you'd expect from a company that won't gain anything from such a huge deal.

The New York State Attorney General's Office is also looking into the possibility that this merger would be illegal under antitrust laws.

"Cell phones are no longer a luxury for a few among us, but a basic necessity. The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise," said AG Eric Schneiderman.

The FCC has also said it will review the case, and an official there told the Wall Street Journal it would be virtually impossible for it to go through.

But AT&T has promised to pay T-Mobile a windfall if the deal does not pass regulatory approval, so the company must have some sort of secret legal loophole up its sleeve.

We'll see what happens when the regulatory process begins later this year.